So Cal housing costs

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So Cal housing costs

Postby jhwalker » Sat Jan 06, 2018 12:20 pm

Last night we drove my by our former Hollywood Knolls house that I bought in 1972 for $44,000 -- it had a 'for sale' sign, Terri checked, it is listed for $1,580,000.
The last time it was sold, a few years ago, $1,000,000 and change. We traded it for the Bell Canyon house in 1992 (a $550,000 paper transaction)
Terri still owns part of her mom's house -- Popo died 7 years ago -- appraised @ $200,000 7 years ago, current offers to buy ,as is, are over $650,000.

I keep saying 'can't continue' but ???
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Re: So Cal housing costs

Postby SonicVenum » Mon Jan 08, 2018 6:58 am

Yeah, the bottom hit in about '09-'10, but prices have been rising steadily since then. You fellas that read more might be able to tell us if we'll see the same kind of bubble burst we saw last time.
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Re: So Cal housing costs

Postby xbacksideslider » Mon Jan 08, 2018 4:03 pm

Rates might rise but I doubt it. The wizards of Wall Street and DC keep pulling tricks out of their hats.

They have to. The Fed/Treasury have to hold rates down to keep the federal debt affordable and to support housing prices. Higher mortgage rates would deflate housing and higher Treasury rates would bust the federal budget.

To pay its debt the Treasury can ask the Fed to create more "keystroke money" which the Fed would use to buy more "keystroke" Treasury bonds and the Treasury would then use that new "keystroke money" to pay interest on its previously issued "keystroke" bonds.

The poor and middle class would be better served by lower housing costs. Low rates and regulation (zoning/building codes/permits/fees/assessments/re-assessments/payoffs) combine to bid up prices and block new supply.

Low rates are not always good. When they are low because of saving, they are good, but when they are low because of government manipulation, they are bad; bad because they incentivize misallocation of investment. Yeah, there's a "stimulus effect" but that operates on the wrong sectors.

Manipulated low rates penalize savers while they reward borrowers who should not be borrowing. Manipulated low rates create false signals about economy; borrowers are tricked into investing while savers are tricked into consuming. The result then is inefficient, wasteful, misallocation.
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Re: So Cal housing costs

Postby xbacksideslider » Mon Jan 08, 2018 6:29 pm

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Re: So Cal housing costs

Postby jhwalker » Tue Jan 09, 2018 8:32 am

xbacksideslider wrote:I wonder if Britain leads a trend?
https://www.thetimes.co.uk/edition/news ... -qxn5gs7f6


Ryan and Brooke are planning to get married soon and want to buy rather than rent. It must be a genetic thang. I would love to ramble on this, but have some pressure
to get the casa 'break-in' damage repairs started. Will ramble later :whistle:
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